East Grinstead Tenant’s Deposits Held Total £1,731,690

Posted by Kate Boyes FARLA MRICS on Mon, 2019-02-18 10:48

With the Government preparing to control tenant’s deposits at five weeks rent, East Grinstead landlords will soon only be protected in the event of a single month of unpaid rental-arrears, at a time when Universal Credit has seen some rent arrears quadrupling and that’s before you consider damage to the property or solicitor costs.

It can’t be disputed that the deposits East Grinstead tenants have to save for, certainly raises the cost of renting, putting another nail in the coffin of the dream of home ownership for many East Grinstead renters whilst at the same time, those same deposits being unable to provide East Grinstead landlords with a decent level of protection against unpaid rent or damage to the property.

In fact, the total of all the tenants’ deposits in East Grinstead, deposited or protected, is £1,731,690

When you consider the value of all the privately rented properties in East Grinstead total £748,912,836, the need for decent landlord insurance to ensure you are adequately covered as an East Grinstead landlord is vital.

However, I want to consider the point of view of the East Grinstead tenant. Several housing charities believe spending more than a third of someone’s salary on rent as exorbitant, yet for the tenants they find themselves in that very position. I feel especially sorry for the East Grinstead youngsters in their 20’s who want to rent a place for themselves, as they face having to pay out the rent and try and save for a deposit for a home.

The average 22 to 29-year-old in East Grinstead spends 43% of their typical salary on a one bed rental property

….and 54% of their salary for a 2-bed home in East Grinstead.

40 years ago, British people who rented spent an average of 10% of their salary on rent, and only 14% in London. Looking in even greater detail, according to the ONS, over the past 60 years the proportion of total spending on all housing (renting and mortgages) has doubled from 9% in the late 1950’s to 18% today. Whilst on the other hand, the proportion of total expenditure on food has halved (33% to 16%), as has the proportion of total spending on clothing (10% to 5%) ... it’s a case of swings and roundabouts!

Yet landlords also face costs that need to be covered from rents including mortgages, landlord insurance (especially the need for the often-inadequate deposits to cover the loss of rent and damage), maintenance and licensing. In fact, rents in the last 10 years have failed to keep up with UK inflation, so in real terms, landlords are worse off when it comes to their rental returns (although they have gained on the increase in East Grinstead property values – but that is only realised when a property sells).

There are a small handful of East Grinstead landlords selling some/or all of their rental portfolio as their portfolios become less economically viable with the recent tax changes for buy to let landlords, which will result in fewer properties available to rent.

However, this will reduce the supply and availability of East Grinstead rental properties, meaning rents will rise (classic textbook supply and demand), thus landlords return and yields will rise.Yet, because tenants still can’t afford to save the deposit for a home (as we discussed above) and we are all living longer, the demand for rental properties across East Grinstead will continue to grow in the next twenty to thirty years as we turn to more European ways where the norm is to rent rather than buy in the 20’s and 30’s age range. This will mean new buy-to-let landlords will be attracted into the market, buy properties for the rental market in East Grinstead and enjoy those higher yields and returns … isn’t it interesting that things mostly always go full circle?

Kate Boyes FARLA MRICS

Group Director

Kate has been letting and managing property for 15 years, having established Alexandre Boyes Residential Lettings in 2003 and Alexandre Boyes Estate & Block Management in 2007. Kate is fiercely proud of the reputation both teams have in Tunbridge Wells & East Grinstead. Kate launched a national product, Resident, in August 2014 being an online property management software that is now utilised by Alexandre Boyes clients enabling them to log in and transparently view information on their blocks of flats and estates.

Kate has a first class honours degree in Land Management from the University of Reading specializing in Investment & Finance, and trained at Nelson Bakewell (now Capita Symonds), a Property Consultancy, in London. She qualified as a Chartered Surveyor in 2004, and is a Fellow of ARLA. She became a Board member of ARLA in June 2015, representing Kent, Essex, Norfolk, Suffolk & Cambridgeshire.

"Our aim over the last 20 years has been to develop Alexandre Boyes into the 'go to' local agent, the alternative choice to the major brands. Contemporary, fresh marketing combined with genuine traditional values and service, and most importantly in depth local as well as professional knowledge make us the obvious choice."

Kate's role at Alexandre Boyes lettings focuses on valuations and new business, procedures & policies, and marketing. In block management she advises on new business, and oversees policy and procedures internally. When she isn't working (which is not very often!) she can be found enjoying a glass of wine at Sankeys or spending time with her three children at home in Sussex.

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